Wildstar,
I have a question unrelated to the current discussion. It relates to concept of diminishing marginal utility as conceived by the Austrian school.
In a previous post, you stated that the reason newspapers are sold in boxes that give the consumers access to multiple newspapers, whereas cans of soda are sold in boxes that deliver them individually, is that the marginal utility of a second newspaper is almost zero. Once the news has been read, a second newspaper usually serves no purpose. However, a second, and third, fourth, etc. can of soda can be stored for future use, given to friends, etc.
Thus, the marginal utility of a second newspaper compared to that of the first newspaper is much lower than the marginal utility of a second can of soda compared to that of the first can of soda.
This statement seems to imply there is a quantitative, not just ordinal, aspect to marginal utility. The difference in marginal utility between the first newspaper and second newspaper is much greater than the difference in marginal utility between the first can of soda and second can of soda. Or put another way, the "slope" of the marginal utility curve (if there is such a thing) tends toward zero much faster for newspapers than for cans of soda.
I thought that the Austrian school did not accept such a notion?
Diminishing marginal utility merely reflects the logical supposition that if you have command of multiple units of a homogeneous economic good you will assign the units so as to satisfy unmet desires in the order of felt urgency.
In either adding or subtracting the command of a unit, it will be the last or least urgent utility that is associated with the marginal unit, and thus gained or lost.
Utility can't be measured, and can only be compared for a single individual at one instant in time, and is only evidenced by the presence or absence of a concrete exchange action.
To the best of my knowledge, there is nothing that precludes hypothetical qualitative inferences about the shape and slope of a supposed utility curve.
Regards, Don |
